What amount should Covereport for share premium on the issuance of theshares?
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4.Cove Corp. issued 6% bonds with a maturity value ofP6,000,000, together with 100,000 shares of its P5 parvalue ordinary shares, for a combined cash amount ofP11,000,000.The market value of Cove's sharescannot be ascertained.If the bonds were issuedseparately, they would have sold for P4,000,000 on an8% yield to maturity basis.What amount should Covereport for share premium on the issuance of theshares?
a.P7,000,000 c.P5,000,000 b.P6,500,000 d.P4,500,000
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- Keir Corporation issues 10%, P5,000,000, 10-year bonds with face value of P1,000 and nondetachable share warrants at 110. Each bond carried one detachable warrant that permits the bondholder to purchase 20 equity shares, par P50, at P55 per share The prevailing market rate of interest for similar bonds without warrants is 12% per annum. On the date of exercise of the warrants, how much is the amount of 'ordinary shares to be recorded?Bond ConversionE11B. Mendoza Corporation has $400,000 of 6 percent bonds outstanding. There is$20,000 of unamortized discount remaining on these bonds after the July 1, 2014,semiannual interest payment. The bonds are convertible at the rate of 20 shares of $5par value common stock for each $1,000 bond. On July 1, 2014, bondholders presented $300,000 of the bonds for conversion.1. Is there a gain or loss on conversion, and if so, how much is it?2. How many shares of common stock are issued in exchange for the bonds?3. In dollar amounts, how does this transaction affect the total liabilities and the totalstockholders’ equity of the company? In your answer, show the effects on fouraccounts.E On January 1, 20x1, Kindness Co. issued 3-year, 10%, P2.000,000 convertible bonds for P2,200,000. Principal is due at maturity but interest is payable every year-end. The bonds are convertible into 6,000 ordinary shares with par value per share of P200. On issuance date, the prevailing market rate of interest for sinmilar debt without a conversion feature was 12%. On December 31, 20x2, Kindness Co. retired all the bonds for P2,000,000. On retirement date, the current rate for similar debt instrument without a conversion feature was 11%. Requirement: Provide all the entries in 20x1 and 20x2.
- Please help with questions, thanks kindly.ABC Corporation has 4,000, 10%, 10-year bonds, face value 1,000, and sold it at 105. Each bond is accompanied by one warrant that permits the bondholder to purchase 20 shares of capital, par 50, at 55 per share, or a total of 80,000 shares. The prevailing market rate of interest for similar bonds without warrants is 12% per annum with which the PV of 1 at 12% for 10 periods is 0.322 and in an ordinary annuity is 5.65 What is the entry to record issuance of the compound instrument and the exercise of the 70% warrants? Assume also the expiration of the 30% warrants and prepare the entry.7. What amount is credited to share premium if all of the share warrants are exercised? A. 4,350,000 B. 3,750,000 C. 4,150,000 D. 0 E. None of the above
- 9. On the first day of 2021, Williams Company issued zero coupon bonds. These bonds have a face value of $5.3 million, a maturity of 15 years, and were issued at a price of $1,920,985. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)Required:What is the interest expense Williams Company reports in its 2021 income statement related to these bonds? (Enter your answer rounded to the nearest whole dollar.)Warbler's Whistles Inc. capital structure includes the following. Bond A: 23,844 bonds with a 5.5% coupon rate, $1,000 par value, with 18.5 years to maturity, selling for $845.70; the bonds compound semiannually. Bond B: 8,680 bonds with a 0% coupon rate, $1,000 par value, with 6 years to maturity, selling for $790.10; the bonds compound semiannually. Common stock: 1,696,220 shares outstanding, selling for $47.28 per share; the beta is 1.4. The market return is currently 12.68%, and the U.S. T-bill currently returns 3.3%. If the tax rate is 21%, what is the company's weighted average cost of capital (WACC)?5. On January 1, 20x1, Kindness Co. issued 3-year, 10%, P2,000,000 convertible bonds for P2,200,000. Principal is due at maturity but interest is payable every year-end. The bonds are convertible into 6,000 ordinary shares with par value per share of P200. On issuance date, the prevailing market rate of interest for similar debt without a conversion feature was 12%. On December 31, 20x2, Kindness Co. retired all the bonds for P2,000,000. On retirement date, the current rate for similar debt instrument without a conversion feature was 11%. Requirement: Provide all the entries in 20x1 and 20x2.
- 25) Harrell's Barrels issued $100 million of 6% convertible bonds at 101. Each $1,000 bond is convertible into 45 shares of Harrell's no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 98. Harrell applies International Financial Reporting Standards. Recording the issuance of the bonds would cause an increase in Harrell's: A) shareholders' equity of $1,000,000. B) shareholders' equity of $3,000,000. C) assets of $98,000,000. D) liabilities of $101,000,000.For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Sage Corp. issued $20,100,000 par value 10% convertible bonds at 98. If the bonds had not been convertible, the company’s investment banker estimates they would have been sold at 95. 2. Pronghorn Company issued $20,100,000 par value 10% bonds at 97. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. 3. Suppose Sepracor, Inc. called its convertible debt in 2020. Assume the following related to the transaction. The 11%, $9,100,000 par value bonds were converted into 910,000 shares of $1 par value common stock on July 1, 2020. On July 1, there was $60,000 of unamortized discount applicable to the bonds, and the company paid an additional $81,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method.…Bennett Inc. issues 100 4% coupon, $1,000 par value bonds maturing in 5 years. The bonds are issued at a price of S92,488 and the market rate for comparable bonds is 5.75%. Assuming that Bennett uses the straight-line method of amortization, interest expense for Year 2 is closest to: O $1,500 O $4,000 O $5,500 O $5,750